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PAC to CIAA: Launch probe into Ncell tax issue

The parliamentary Public Accounts Committee (PAC) on Sunday directed the Commission for the Investigation of Abuse of Authority (CIAA) to launch a probe against officials and agencies who failed to collect capital gains tax on the Ncell buyout deal.

The parliamentary Public Accounts Committee (PAC) on Sunday directed the Commission for the Investigation of Abuse of Authority (CIAA) to launch a probe against officials and agencies who failed to collect capital gains tax on the Ncell buyout deal.

This is the fourth official communication from the House panel to the CIAA to investigate the tax issue in the Ncell buyout deal, the biggest corporate buyout in Nepal where Swedish telecom giant Telia sold its stake in Ncell to Malaysian company Axiata for $1.03 billion in 2015.

The anti-graft body, however, seems to be dragging its feet and has made no headway so far. PAC had directed the CIAA to probe the issue in May. It has been almost a year since the first directive was issued and two follow-ups, but the CIAA hasn’t made any official correspondence to the parliamentary committee.

During the tenure of former chief commissioner Lok Man Singh Karki, the CIAA had been criticized for engaging in petty issues and not focusing on large issues. Last January, the Supreme Court suspended Karki ruling that he was ineligible to head the anti-graft body.

Even after Karki’s exit, there seems to have been no big development with regard to the tax issue.

After the CIAA showed no interest in pursuing the case, PAC Chairman Dor Prasad Upadhyay on Sunday proposed directing the National Vigilance Centre to look into it. However, the proposal couldn’t be passed due to strong opposition from parliamentarians.

“We have told the CIAA time and again, but they have done nothing. This is why I have proposed directing the National Vigilance Centre,” Upadhyay said.

Parliamentarians rejected the proposal saying that the National Vigilance Centre was under the direct control of the prime minister and that it shouldn’t be allowed to conduct investigations.

Secretary of the National Vigilance Centre Gajendra Kumar Thakur attended the meeting on Sunday, according to the PAC secretariat. He hadn’t been officially invited to the meeting, and his presence fuelled suspicions among parliamentarians as the PAC is headed by a Maoist Centre leader.

Upadhyay told the Post that he had received informal information that the CIAA had launched an investigation. “The CIAA went through severe ups and downs in the past one year. This may have made it difficult for them to respond promptly. Since the CIAA’s internal issues have been sorted out, we expect them to answer at the earliest possible,” Upadhyay said.

PAC member Dhan Raj Gurung told the media after Sunday’s meeting that the House panel should summon the CIAA if it fails to respond again.

Meanwhile, deputy spokesperson for the CIAA Khagendra Prasad Rijal told the Post that the anti-graft body had initiated an investigation even before receiving

a directive from the House committee.

“It is not that we have not done anything. An investigation is underway, so we cannot reveal more information,” Rijal said, adding that the constitutional body would be holding an internal meeting soon and clarify its position to the PAC.

After Telia sold its stake in 2015, Ncell has deposited Rs9.97 billion with the

government as 15 percent withholding tax, or tax deductible at source for capital gains. Tax authorities have not determined the exact amount of tax that Telia needs to deposit.